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Budget Figures Confirm Needed Spending Cuts

OCEAN CITY — All the budget cuts in the town of Ocean City have apparently paid off, as the town seems to have a substantial surplus, setting it in the black, as opposed to other municipalities who are teetering closer to the red.

During Budget Manager Jennie Knapp’s second amendment reading to the FY2010 budget for the town of Ocean City, it was revealed that as expected, the $2.7 million in budget cuts passed down by City Manager Dennis Dare and the Mayor and City Council have eased the sting of decreasing revenues and increased costs to the town.

“They say that in this economy, breaking even is actually being up,” said Council President Joe Mitrecic. “So it shows that the rightsizing of the way the town operates was the right thing to do and puts us in a lot better position than a lot of other places.”

Knapp reported revenue reductions of about $720,000 while reporting total increases of just over $1 million.

However, the $213,000 less in room tax revenue collected means that the FY 2010 advertising budget for the town will be reduced by $78,000, according to Knapp.

However, it was Dare’s “rightsizing” of local government operations, most notably massive cuts to departments and huge sacrifices by town that will be looked back upon in future years as the tactic that made the biggest difference.

Councilman Joe Hall commended the employees and the department heads of Ocean City for making the cuts that have paid off to date.

“We are trying to maintain in these tough times rather than go backwards and I think the employees get that in Ocean City,” said Hall. “I think a lot of them are willing to forgo some of the things like raises and other adjustments as long as they still have their jobs.”

Some on the council have expressed concern however, that the ongoing conversation to perhaps alter the benefits and pension packages for town employees could be asking too much of the town’s team of workers.

“What we are talking about concerning the benefits package has absolutely nothing to do with current employees,” said Mitrecic. “We are simply evaluating what kind of a package we should be offering to new employees in Ocean City.”

City Manager Dennis Dare, however, realizes trimming the benefits package for new government workers will have an adverse effect on not only recruitment but also retention of new employees.

“I can see how talking about benefits could cause some alarm with employees, but we don’t buy into a broad-brush approach to all of this,” said Dare. “We’ve made a lot of changes this year because we had a good idea what was coming in this bad economic situation, and we wanted to bring ourselves in on a landing we could walk away from, rather than crash land.”

Mayor Rick Meehan addressed the Economic Development Committee this week and announced the position that the town had put itself in with all the budget cuts and was obviously pleased with how Ocean City has managed itself through the rough economic times.

“We positioned ourselves well through this transition, and we saved $2.7 million that will go back into the fund balance to help absorb and manage some of the reductions that we figured were coming this year,” said Meehan.

Virtually every department in the town experienced some form of increased cost or revenue reduction. The town’s golf course, for instance, lost almost $250,000 due to lost greens fees, cart rentals and pro-shop sales.

Dare said that the rounds played at Eagle’s Landing were actually up this year, but the break in the town’s relationship with the now defunct Pam’s Golf LLC, which did a vast majority of the booking for the course, has played a major role in the decline in numbers.

Although Dare said the town is committed to make the course affordable to locals and visitors, he did concede that the budget may have been struck “a bit more optimistic than perhaps it should have been,” citing that projections for business at Eagle’s Landing was expected to be stronger than it was.

There was also $108,000 in increased costs for lighting at the Roland E. Powell Convention Center, making a strong case for those who were in favor of the multi-million dollar expansion to the center (which awaits final approval from the state Board of Public Works) and will include energy efficient lighting and heating fixtures.

Still, Meehan noted the sacrifices made by the employees and the departments in Ocean City and noted that future conversations about amendments to the town’s pension or benefit programs is merely just a conversation at this point.

“We are a service business, and you can’t provide the type of service we provide without great people, but some members of the council have asked for information concerning the benefits packages that we offer employees and they want to see if what we are offering is at the appropriate level,” Meehan said.

Meehan also noted that several years ago, when the town did a study about government salaries, the employees received a pay-increase when the study found that the town was below the industry benchmark of sorts.